Common pitfalls when buying a property in France

Though the credit crunch has taken its toll on the property market in the UK and further afield, it is not without its silver lining. Perhaps surprisingly we have recently seen an increase in interest from UK citizens looking to buy properties abroad, particularly in France. The combination of more sober property valuations and lower cost credit have provided an opportunity for many to pick up their dream holiday home in the French idyl at better terms than they may otherwise have expected. However, as with any property purchase, buying in France is not with out risks and potential pitfalls, Here are some of the issues our previous Buyers have mentioned to us that we thought worth repeating.

1. Underestimating costs: Costs associated with buying a property in the UK can be expensive but they pale when compared to buying overseas. Between the local and national taxes, duties, insurance, life assurance and the notary fees that are payable, we advise clients to reckon with paying 10-12% of the cost of their property in charges over and above the purchase price.
2. Not understanding French mortgage affordability criteria: In France, as in most European countries apart from the UK, your affordability is assessed based on your debt service costs as a percentage of your net income. In summary, the total payments you make each month on all your secured and unsecured debts - including your UK mortgage and any other personal loans as well as the mortgage you are attempting to take out - must not exceed 35% of your net monthly income. There is no flexibility on this
3. Currency risk: If it's a holiday home with minimal/no rental income and the mortgage is in Euros then there is an exchange rate risk to those in the UK earning Pounds. With all the turbulence in the Euro area just now, who knows where the exchange rate will be in 3 or 5 years but you need to make sure you have cover in case it moves against you.
4. Relying too much on rental income: As any landlord will tell you, managing a property is difficult. It's hard enough when the property is near you but when it's hundreds of miles away and in a different country with a different language, the risk increases. Invariably clients who rely on rental income overestimate occupancy rates and this impact their financial situation. Be conservative and then some.
5. Not shopping around for a mortgage: The perception may be that any finance is difficult to get and the temptation therefore may be to accept the first offer you get. This would be a mistake as it's actually quite a competitive market and there are good deals to be had.

At Choice Loans we work with a dedicated French mortgage broker who is a British Ex-pat who has been living in France and arranging mortgages for UK nationals for over 15 years. This means you have both the convenience of dealing with someone in your own language (who is also fluent in French, of course) and the benefit of being advised by someone who is intimately familiar with the French mortgage market and how it works for UK nationals. We feel this level of specialism provides the best all-round service so we are happy to recommend it to our clients. To find out if you are eligible for a French mortgage and how much you can borrow we can get an Agreement in Principle for you at no cost. This will put you in a much strong negotiating position when you go to buy. If you would like to know more about getting a French mortgage or to be connected with a specialist French mortgage broker please either call us on 0845 126 0350 or complete our Overseas Mortgage Enquiry form here and we will get in contact with you.